These are not revised assessments, and circumstances may have changed in the market from the time of original publication. We also include older commentaries that our editors have determined may be of interest to our audience. Your feedback is always welcome.
As part of Cumberland Advisors’ continuous effort to maintain strong customer relationships, we offer this week’s short video discussing current market conditions and how we are positioning portfolios.
Matt McAleer & Equities / ETFs
-Indexes very, very strong
-What was the “tell” or “tells” for market action this week?
–Expanding breath – more sectors, more industries getting into the game
–The Russell 2000 Index up 3x the S&P 500 last 90 days
–The S&P 500, respectable 7% return over the last 90 days
–The Russell 2000 Index at 22% over the last 90 days
–Capital coming into the market was looking for areas that hadn’t participated previously
–This goes to the heart of how poorly positioned large baskets of capital were coming into this election
–Very difficult to fight headlines- we try to ignore or only pay attention to the reaction to them
—COVID & Election headlines cause money to leave the market
–Recall the iShares chart we previously highlighted in September demonstrated less than 5% of inflows went into equities
–That’s a paltry amount in terms of flow
-Let talk about a new chart that shows the NY Stock Exchange high/low index (I explain in video)
-The coming vaccines and loose Fed policy have finally resulted in rates coming up
-There’s some more confidence now in the economy and new year
John Mousseau & Fixed Income / Munis
-Bond Market- yields higher this week
-We saw a non-farm payroll increase this week, less than expected
-We know November numbers were bad, we saw increase in COVID-19 in many places
-What was surprising? Bond Market reaction sending bond prices lower and yields higher
-COVID-19 has gone from an unknown to a known
-Munis? Unchanged for the week.
-In the muni world, the market is already discounting the fact that it’s going to be winding down very soon. Supply has picked up a little bit but it will be gone in a couple of weeks and we have two big months of reinvestment, December & January, ahead of us.
-One more thing- when you look at the future, it’s looking more and more like we’re going to have split government, so the market is feeling pretty good that the status quo will probably be what you see with probably marginal tax rates and that’s it.
-We put out a new commentary this week titled “The Cumberland State of Despair Index.” It tries to capture the despair caused by unemployment brought on by the pandemic & COVID-19 infection rates on a state-by-state basis. This Index will be applied as a variable in our credit-scoring model.
-Read it here: https://www.cumber.com/cumberland-advisors-market-commentary-the-cumberland-state-of-despair-index/
-Matt McAleer & Cumberland Advisors
Send your feedback from today’s email/video to Matt. You can reach him at:
-Link to Matt’s Email: Matthew.McAleer@Cumber.com
-Link to Matt’s Twitter: https://twitter.com/MattMcAleer4
-Link to Matt’s LinkedIn: https://www.linkedin.com/in/matthew-c-mcaleer/
-Call Matt: (800) 257-7013Other questions or comments? Email us at email@example.com or give us a call at (800) 257-7013.
Contact Matt or any one of our advisors by following this link: https://www.cumber.com/our-people/
The Role of Nurses – Complimentary Video Replay
Cumberland Advisors is an Annual Sponsor
of the Global Interdependence Center
About the Briefing
The Role of Nurses is the theme of this Executive Briefing. Attendees are offered context and perspective regarding the critical role that nurses play in the response to COVID-19 as well as changes to the nursing curriculum as a result of the pandemic.
Presentation Documents & Video Replay Link from December 3, 2020
U.S. companies raised cash this year after issuing record-breaking amounts of debt to strengthen their balance sheets in response to the Covid-19 pandemic disruptions on their normal operations. As of Nov. 30, U.S. companies issued over $2 trillion of investment-grade and high-yield bonds, the most on record in data going back to 2006. Meanwhile, many cut back on repurchases, dividends or capital expenditures given the uncertain market environment.
Furthermore, many anticipate companies to take advantage of this lower-for-longer interest rate environment to maintain high leverage to support growth ahead.
“It doesn’t make sense for cash-laden companies to pay down debt in this interest-rate climate,” David Kotok, chief investment officer at Cumberland Advisors, told the WSJ. “That cash is going to be put to more shareholder-friendly uses.”
For example, some expect companies to engage in more mergers and acquisitions. M&A activity remains historically depressed for the fourth quarter, revealing many companies remain hesitant to chase after big purchases. As of Monday, about $313 billion in acquisitions in the U.S. have been announced for the fourth quarter, the lowest amount for the period since 2013.
Read the full article here: https://www.etftrends.com/equity-etf-channel/small-cap-etfs-could-benefit-from-greater-ma-activity-ahead/
Or the Wall Street Journal here (paywall): https://www.wsj.com/articles/investors-circle-largest-corporate-cash-hoard-ever-11607086917
Cumberland Advisors Market Commentary offers insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies. Our readers appreciate its timeliness, depth of analysis, and quality of research.
To read current and past commentaries, visit https://www.cumber.com/category/market-commentary/
We expect the new Biden administration to reverse on a massive scale Trump’s deregulation of energy and to turn strongly to sustainable-energy policy. The implications for investing in ESG are huge. Cumberland holds positions in wind, solar and water and we expect to hold those positions for a long cycle of growth. Markets are already […]
A Bleak Short-Term COVID Outlook, Then Recovery Dawns Fact is, during the darkest hours before light breaks, dawn is already racing toward us across the surface of the turning world. That’s an image – a reassuring metaphor – that can sustain us now. America’s darkest hours in the COVID-19 pandemic lie just ahead, over the […]
Municipal bond ratings are affected by the preparedness of the issuers for severe weather, the impacts of climate change, and other factors that may affect credit ratings. Cumberland Advisors takes a keen interest in the micro and macro details surrounding municipalities and weather events. Our colleague Bob Bunting, meteorologist, professor, and former executive at both […]
Will the NASDAQ crash? We get that question often. Here’s a Bloomberg discussion on that subject and a Bloomberg chart comparing the NASDAQ bubble 20 years ago with the NASDAQ spike this year: “Nasdaq-100 Stumbles Near Dot-Com Era Record Versus Dow,” https://theonedave.tumblr.com/post/634605567333236737/nasdaq-100-stumbles-near-dot-com-era-record-versus. And here’s a Cumberland commentary we wrote at the peak of the NASDAQ […]
The University of South Florida Foundation has received a $57,000 donation from Sarasota businessman David Kotok and his partner Christine Schlesinger to support the development and delivery of a new continuing education training program by the USF Health College of Nursing.
The program will help nurses stay safe while treating patients during the COVID-19 pandemic.
The four-part educational series, “Frontline Nursing During COVID-19: A New Paradigm,” will be offered virtually to nurses locally, statewide, and nationally starting in early February.
“Markets, as we see it, are looking beyond next spring. Its the classic 6 or 9 months forward looking, post-vaccine recovery. And you see some forecasts of the roaring 2020s…”
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Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.